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Why are Indians (and Filipinos) better at providing services rather than at making good IT products?

February 3, 2010

Recently Sachin Dabir, a Senior Manager at Red Hat Asia Pacific, posed an interesting question on his blog where he asked (and answered) why Indians are good at coming up with IT solutions and services, but are lousy at making good IT products. To put things in context: Sachin first noted that over the past year, he has been meeting with software companies across the APAC region and from his meetings he has noted that these companies all have clients across the region and even as far away as Europe or the USA. Furthermore, he noted that these are small and medium sized companies with only 10 to 50 employees; and yet, all of them have managed to find buyers in other parts of the world who trust both the products and the companies themselves.

On the other hand, Sachin noted that despite the well earned respect that Indians have in the IT industry, Indian companies tend to not instill confidence about Indian product capabilities. Instead, Indians are good at coming up with “big picture” solutions that can be tweaked to solve problems and they are comfortable with ambiguity – a quality that is not good for making new IT products. Moreover, he noted that Indians themselves, even in general conversations, tend to not be precise and to also talk in generalities while education in India strives to encourage students to be creative and to think outside the box.

Meanwhile, Sachin’s observations has inspired Filipino blogger Jan Pabellon to note on the Brain Gain Network that Filipinos share many of the same traits that Indians do and that they also excel at providing services (along with anything related to entertainment or the arts) but aren’t so good at creating products. In fact, Jan even noted that Tagalog in general is a genderless language (unlike many Western European languages) and that Filipinos are imprecise when it comes to setting meeting times and giving directions. However and in the same manner that Indians have come up with few actual IT products and have instead excelled at providing IT services and solutions, it should be noted that Filipinos have excelled at providing voice-related and back office related services.

In other words, the geography of the global IT, IT services and outsourcing industries tends to reflect certain cultural nuisances. Case in point: In the past, Indian outsourcing and IT service providers have experienced difficulties in penetrating the Japanese market. Why? Simply put, the Confucian influenced Japanese who are the masters of product development tend to want things done perfectly from the start – no matter how long it takes. In other words, they are not comfortable with the ambiguity of coming up with a “big picture” solution and then working out all of the the bugs later. Hence, the Japanese have instead tended to outsource their IT work to outsourcers in Confucian influenced China and/or Vietnam rather than to Indian outsourcers.

Nevertheless, neither Sachin nor Jan really choose to delve in a debate about whether their respective countries should capitalize on providing solutions and services rather than strive to build actual products. Nevertheless, their observations are interesting and well worth noting.

Hi! Thanks for the mention and link to my post. I discuss a little the challenges Filipino companies face in building products and product companies in the same site here: http://www.bgn.org/blogs/post/1360 – What does it take for Filipino software companies to go global? I also did a follow up post here: http://www.bgn.org/blogs/post/1437 – Is being in the Philippines bane or boon for founding a tech startup?

I think that just by being aware of the reasons that are holding back the Filipinos and Indians from being able to make globally competitive IT products is a huge step in itself.. It’s up to them to take it a step further.. Nice post!